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Going Digital: How OZ Publishers & Booksellers Will Survive In 2012

By Matthew Lentini | Tuesday | 24/01/2012

2011 saw the loss of over 2,000 jobs in the book industry as eBooks take over print, but government reforms could toughen up the industry in 2012.

Apple has just shifted its eBook platform into the education sphere, and online e-tailer giant Amazon has already been outselling its own stock of print books with eBooks, not including free eBooks being snapped up by readers.

Australian booksellers are being outgunned by overseas competitors, but industry papers point to a strong potential future given the right government reforms and reshaped business practices.

A market analysis of the book industry by PriceWaterhouseCoopers last year for the Book Industry Strategy Group found that Australian booksellers were being outpriced not only by foreign digital distributors but even foreign print book exporters.

"A bookstore in Sydney now has to compete with not only its rivals down the street, but also the likes of Amazon and Book Depository. These online giants are also challenging the business models of publishers, as the latter were traditionally the only source of imported books into Australia," said the paper.

A British business could potentially post the same sized parcel as an Australian business to an Australian address at around 90 per cent less than the local competitor.

"Relative to other retail industries, the Australian book industry underperformed over the past decade.

"The eBook market in Australia is projected to reach between $150 million and $700 million in 2014, representing between 6 per cent and 24 per cent of total estimated book sales."

A report just issued by the Pew Research Centre found that a quarter of the US population use a digital reading device, whether it be an iPad or Amazon Kindle.

Australia is losing out to foreign book and ebook resellers on the back of GST, an unfavourable exchange rate, wholesale book prices and postage costs.

The Government is set to respond to a report from its book industry advisory body, the Book Industry Strategy Group (BISG), early this year after it recommended action to protect local authors, publishers and resellers.

The 'Final Report To Government' predicts that a quarter of the book market in Australia, or $700 million, will be digital, but recommends government reform to keep Australia competitive.

The proposed reforms parallel many of the propositions made by other retailers facing staunch competition from e-tailers, including an abolition of GST or imposition of GST on foreign e-tailers, tax support, investment and subsidies.

Other recommendations include further investment in digital education initiatives, development of digital skills in the workforce, subsidies for a National University Press Network, and investment in digital distribution infrastructure.

2012 marks a new competitive year for the growing eBook market, with rivalling formats at each other's throats. This year will mark the end of Microsoft's support for its Microsoft Reader and its .lit format, with formats like Amazon's .mobi and .azw taking the spotlight.

Australian publishers and developers have been adapting to the new rules of a new market and have brought creativity to the table to serve up new ways of breaking out onto the electronic page.

Melbourne-based Inventive Labs has been working on its own eBook platform for publishing, selling and reading content through HTML5 to run across devices since 2010.

Australian developers have been working on content-rich eBooks in the form of apps with the American-owned Demibooks.

With many users jumping onto eBooks because of the portability of their devices, the very power of their devices over the printed page has sparked new demand, according to one developer.

"Now we've got new readers like the Kindle Fire and ones that run Android and have better processors and can deliver more diverse content. Inevitably, readers will look for richer content," said Andrew Skinner, the creative technologist behind the Sydney wing of Demibooks.

Getting creative with distribution, creating dedicated apps as well as conventionally published eBooks, allows publishers to have their books exposed to readers in Apple's App Store and eBook stores like Amazon's.

"Discoverability is an ongoing problem for publishers," added Skinner.

More positivity has come out of the University of Melbourne, where its Book Industry Study Group last year saw the development of Aussie publishers: "the [book publishing] industry has had to innovate to remain competitive. It has a well-established digital supply chain from author through editor, designer and typesetter to printing press."

New technologies have surfaced more problems, with faster internet paving the way for more efficient copyright pirates. The BISG recommended the government work at reforms to enforce copyright protection, as some see the upcoming National Broadband Network (NBN) as a high-speed gateway for more piracy.

"While the potential for legitimate growth and innovation in the new NBN-enabled economy is significant, the extent of online copyright theft may no doubt increase also. In circumstances where free illegal alternatives remain available without effective sanctions (or even the prospect of effective sanctions) the full potential of innovative digital distribution models for music and books may be throttled," said a 2010 paper titled Music Industry Piracy Investigations.

An industry report authored by Dennis Perry late last year points out the new ways of remaining relevant in today's market and the attitudes booksellers need to adopt.

"Book industry job descriptions will have to be rewritten, new jobs defined and created. If you accept that randomness plays a large role in taste, then social media and the tools that enable self-publishing have to feature in the future of the book. There have to be endless possibilities and a bright future," said the Digital Technologies In Australia's Book Industry report.

The answer, "Yes we can get the book for you in 3 or 4 days" is completely different to the proactive - "We think you might like this book too". It may be annoying to some people, but these sorts of algorithms are a fact of life on the web, and that's where a lot of people hang out these days. Don't lose sight of the fact that it's the power of the databases held by Amazon, Google and Apple that are at work in the background.

"We need to look to supporting the innovators, young and old, who are taking on the risks of publishing, which have been a feature of the industry since it began, but offer different challenges in the digital era."

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